Graham NortonIan West/PA Wire/Press Association Images

The freezing of the licence fee has forced the BBC to get its finger out and do some serious cost-cutting. Over the course of last year it has been flogging buildings, tinkering with the pension scheme, bringing down management salaries, and cutting the pay of its top talent.

In the process it has slashed an impressive £37.1 million off spending on TV channels (although radio spending rose by £2 million). So is it doing a sterling job of cutting costs and delivering quality, or should this raise concerns?

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Relocation

A glance at the Annual Report shows there has been some serious cost cutting. One of the major changes was a wholesale shift north.Television Centre in west London has been sold for £200 million, and staff have either been shifted north to Salford, or into central London.

The reaction of staff now based in Manchester's twin city has been mixed to say the least. However, for viewers the sole impact seems to be that individuals who can only make it to the old London studio have appeared to be filmed in a deserted warehouse.

How the rich get richer



Meanwhile, BBC Worldwide - the profitable magazines division, has been sold off for £95 million - which begs the question of whether the loss of the income stream was a price worth paying for an initial injection of cash. However, at the moment the Trust is enjoying the cash too much to worry about the long term.

There has also been a massive change to staff pensions, which created a huge outcry and led to industrial action, but which has gone ahead and saved the BBC £45 million. There will be those who argue that this was too high a price to pay, while others highlight that the scheme is still generous.

Staffing

Staffing changes have had a major impact too.The board has been cut from 13 members to seven - which helped shave the pay bill from around £5.7 million to more like £2.5 million.

Mark Thompson, the director general, took a pay cut to £622,0000 (from £799,000) and the bill will fall further next year when he steps down and George Entwistle takes over with a salary of £450,000 - which is still pretty hefty. The cull of staff has gone further, with 342 employees losing their jobs - including 70 senior managers.

Talent

The talent has also seen a drop in wages. The total 'talent' bill for presenters has shrunk £9.5 million to £203 million. The number of stars fetching more than £1 million has fallen from '7-9' last year to '3-6 this year'. There are no details in the accounts for who is earning these sums. However, reports have variously mentioned Graham Norton, Gary Lineker, Alan Hansen and Chris Evans as likely candidates for the top salaries.

The BBC said that as a result of the cuts, some stars had chosen to go elsewhere. However, there will be those who argue that a public service broadcaster shouldn't be in the business of joining a bidding war for famous faces. There will also be those who question how the bill for presenters can still top £203 million. Is the UK really packed with such indispensable talent?

Programmes

But while all these changes have had an affect, by far the biggest change affecting viewers is that some of the cost-cutting has come with a real shift in output. Drama has felt the pinch, with 156 fewer hours of TV drama produced during the year. Sport has also been a massive casualty, with 389 fewer hours of sport broadcast on the BBC last year. The time has been made up by 327 more hours of cheaper entertainment shows and 307 more hours of factual programming.

These will be those who question whether a shift away from original drama to more programmes about renovating someone's kitchen or giving them a new look is a good sign of progress. However, there will be others who argue that coverage of sport is an expensive business, best provided by commercial entities which can sell the programming on for a profit.

What do you think? Let us know in the comments.

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